The Value of Going Green for Manufacturing Companies

Posted 04/14/2016 by Crestmark Bank

You may be green in the face from all the talk about “going green.” This trend over the last decade refers to the attention and effort to reduce waste in all areas of our lives, adopt more sustainable processes, and use materials that have minimal impact on the environment.

There are many steps businesses can take to become green, but you may be asking why. In the manufacturing industry, the focus is usually on increasing revenue, cutting costs and maximizing production. Implementing green practices is compatible with operational efficiency, cost control, and profits. In fact, these goals work in harmony with each other! Let’s take a look at the value of going green, not just for our planet, but for your bottom line.

Saving Money

The good news is, going green can help control costs. Take a look at General Motors and their Assembly Plant in Orion, Michigan. They have been using gas from landfills for heating and cooling, eliminating their prior use of coal. The landfill gas provides 66 percent of the energy used at Orion. In addition, Orion has a 350-kilowatt solar array that sends clean energy to the grid.

The plant’s processes have been changed to reuse and recycle in all possible areas. Shipping crates are donated to community gardens in Detroit for creating raised beds, and also used to create a rooftop garden on a parking structure at the GM Renaissance Center.

The plant is recognized as one of the most innovative assembly factories for car production. In addition, employees are encouraged to be resourceful and innovative in support of the plant’s green goals. Whether it is reusing rags in the paint shop or recycling, employees are participating in, and leading, green initiatives at Orion.

Increasing Top Line Revenue

Going green is not only useful for reducing costs, it can also increase revenue. Consumers, more than ever, want to do business with companies that demonstrate a commitment to policies and procedures that are socially and environmentally responsible. Consumers not only prefer companies to have environmentally sustainable initiatives — they expect them. There is a competitive advantage in manufacturing products with a minimum of carbon emissions and waste.

Imagine a consumer deciding between your product and that of a competitor – to them there may not be a clear distinction between the products, except that yours is produced in a green manufacturing plant. For many consumers, green practices align with their personal value system, and your company gains the advantage.

Tax Incentives

In addition, tax incentives are often provided to make it more affordable for businesses to go green. The solar industry is reaping the benefits of a bill, passed by Congress, and signed by President Obama, in December 2015, providing a five-year solar investment tax credit (TCC) extension, among other provisions. The incentives in the bill provided essential support for the burgeoning solar industry in the U.S., which has been a bright spot in the economy over the past several years.

Being Good to the Environment

Adopting sustainable manufacturing practices enhances brand value. Manufacturers have long been criticized for contributing to water pollution, and releasing greenhouse gasses into the air.

But some progress has been made. Advances in technology have lowered the expense of transitioning to renewable, clean energy, and other green practices. If your company is not ready to revamp its energy source, or make major changes, there are simple ways to begin transitioning to a green environment, such as mandating the use of non-toxic cleaning supplies, and insisting on office furnishings that emit fewer toxic gasses.

Manufacturers, evaluating how to join the green economy, have an array of new ideas to consider. When going green doesn’t cost your business green, there are fewer barriers to this commitment. Go green.

If you’re ready to be part of the green evolution, Crestmark can help! Call us today to hear about flexible financing options that could provide working capital to makeover your manufacturing facility!